On January 15, the end of the first biweekly pay period of the year, North Company's payroll register showed that its employees earned $35,000 of sales salaries. Withholdings from the employees' salaries include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $6,500 of federal income taxes, $772.50 of medical insurance deductions, and $120 of union dues. No employee earned more than $7,000 in this first period. Prepare the journal entry to record North Company's January 15.

Question

Eddie Khan

Business

6 November, 14:45

On January 15, the end of the first biweekly pay period of the year, North Company's payroll register showed that its employees earned $35,000 of sales salaries. Withholdings from the employees' salaries include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $6,500 of federal income taxes, $772.50 of medical insurance deductions, and $120 of union dues. No employee earned more than $7,000 in this first period. Prepare the journal entry to record North Company's January 15.

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Isabel Schmitt · Answer 1

The Journal entry is as follows:

Sales salary expense A/c Dr. $35,000

To FICA social security tax $2,170

To FICA medicare tax $507.50

To federal income tax $6,500

To medical insurance deduction $772.50

To union dues $120

To sales salaries payable $24,930

(To record the employee payroll for the period)

Notes:

FICA social security tax = $35,000 * 6.2%

= $2,170

FICA medicare tax = $35,000 * 1.45%

= $507.50